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A recent analysis by an Australian asset finance provider has revealed an astronomical uptake in loan applications from SMEs.
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Loan applications from SMEs up 400%
17 November 2015
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8 minute read
NLG Leasing has revealed a 400 per cent increase in SME loan applications between October 2014 and October 2015.
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The increase was largely attributed to the introduction earlier this year of a tax incentive through which SMEs with an annual turnover of less than $2 million could receive an instant tax deduction for business-related purchases of items costing up to $20,000 each.
Prior to the change, the deduction threshold stood at $1,000.
Frank Crombie, NLG Leasing’s director of aggregation services, suggested that the tax deduction initiative represents a significant opportunity for accountants, particularly if the $20,000 business purchase is structured through a lease or chattel mortgage.
“SMEs are continuously seeking alternate financing solutions,” Mr Crombie said.
“Financing business goods through asset finance alleviates cash flow whilst still enabling the benefit of the tax deduction. The acquisition through a leasing structure is a smart alternative that allows the reallocation of funds to other areas of the business that can have a positive effect on efficiencies, productivity, sales, and ultimately, growth."
Mr Crombie added that “the good news” for accountants is set to continue, with the tax incentive applying to business purchases made prior to 30 June 2017.
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